The $250 hour

When a $250/ hour does not equal $250/hour

I get paid between $125 and $250/hour for workshops when I do them for other people. It takes me 2 x as much time to prepare for them as for presenting them. For every 2 hour workshop I spend 4 hours preparing. That doesn’t count the time to get there set up, and stay to answer questions and follow up.

When I do workshops myself, I make anywhere from 0 to much more. Along with prep time, there is logistics, and marketing.

I charge $500 for  business strategy sessions that last around 2 hours. I spend time before we get together researching the business and their industry. I send a follow up report and other materials. I know it’s a good investment because I can find ways to save and to make more than $500. These sessions are not about the face time, they are all about the value I provide.

I will do a one hour $250 session, but quite frankly, it’s a loss leader for me. Realistically for me, I can only do a few of these a week, otherwise, I wouldn’t be able to keep up with the pre and post work. Dollar for dollar, there is more superficial value here, but it’s too short a time to dig to find the priorities, not just the low hanging fruit.

In the same way that a good such as clothes or car parts is marked up to cover the costs to get it into your hands, information reflects so much more than just the time to hand it over. A $250 hour is not just an hour.


Your lesson

When you come up with pricing, you need to think about all the time it takes. It helps to think about it in terms of how many can you do in a week. That includes your Sunday afternoons doing the bookkeeping and your evenings returning calls and your early morning preparation for the day.

Don’t forget about sales time, professional development and follow up. They are all very important in providing really good value.

Not every hour is worth $250

Different work is priced differently. I do other work that is much lower value and I charge much less for it. I don’t mind doing that sometimes because it’s work that I don’t have to prep for it, it’s mostly ongoing, and the time is pretty much just the time spent and billed. It also tends to be the easy work for me.

Your lesson

It’s okay to have different rates for different work. It means you can charge more for work that provides more value because of your distinct skills, talents and strengths. It costs you money to get a new client, so once you have a client, your best pricing should be for them.

Do you charge the same rate for changing oil as you do for diagnostic work? Do you charge the same rate for a 1 hour repair as you do for a 9 hour job?

Knowing where to hit

Once a large ship’s engine failed. The ship’s owners tried one expert after another, but none of them could figure how to fix the engine. Then they brought in an old man who had been fixing ships since he was a youngster. He carried a large bag of tools with him, and when he arrived, he immediately went to work. He inspected the engine very carefully, top to bottom.

Two of the ship’s owners were there, watching this man, hoping he would know what to do. After looking things over, the old man reached into his bag and pulled out a small hammer. He gently tapped something. Instantly, the engine lurched into life. He carefully put his hammer away. The engine was fixed! A week later, the owners received a bill from the old man for one thousand rupees.

“What?!” the owners exclaimed. “He hardly did anything!”

So they wrote the old man a note saying, “Please send us an itemized bill.”

The man sent a bill that read:

Tapping with a hammer …………………… $ 10.00

Knowing where to tap …………………….. $ 990.00


This story is told many times. Sometimes it’s a car, sometimes it’s machinery in a factory. The ultimate price goes up based on the cost of the cost of the machine sitting idle.

Your Lesson

You know more than your client and that knowledge took you a long time to get. That invested time has value.

People aren’t interested in information, they need answers to their problems. They aren’t looking for a how-to manual, they want their problem solved.

The bigger the problem, the more value you bring. Focus on solving bigger problems if you want to increase your value and your rates.

Who pays $250/hour?

Not everyone will pay for all you bring. Sometimes it seems like the people who need us most have the least ability to pay.

I had a client who needed some help with making his business more profitable. He wasn’t able to pay the full fee, but could I help him anyway. I did. We did a short session. He was a current client so I was already pretty familiar with his situation.

I followed up a few weeks later. No, he hadn’t had the time to implement most of my suggestions, he was too busy buying and setting up his new big screen tv (back when they were much more expensive than today.

Six months later he asked to get together again, because he was in trouble again and he wanted to go over some of the solutions we had talked about. No, he couldn’t pay my full fee, but this was only a follow up, right?

I learned that people will value your help at what they pay for it; that ability to pay is very relative; and once you give your time, people believe that’s how you value it, too.

Your Lesson

Who will pay $250 ?

  • People who believe in their business and want to invest in making it better
  • People who are open and willing to make changes
  • People who have experienced how a small change can equal big returns over a period of time
  • People who value their own time

How about you?

Are you worth $250/hour

Could investing $250/hour save or make your business more than that?

What would it take for you to make $250/hour – and how many of those hours can you do in a week?

What do you think?

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